Democratic Sens. Kirsten Gillibrand, Charles Schumer, Harry Reid and Patty Murray talk Thursday about the STOCK Act.
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Democratic Sens. Kirsten Gillibrand, Charles Schumer, Harry Reid and Patty Murray talk Thursday about the STOCK Act.

Story highlights

The measure supported by President Obama now goes to the House

It won bipartisan support in the Senate on a 96-3 vote

The bill clarifies that insider trading is illegal for members of Congress and their staffs

Also covered by the bill's measures are many executive-branch employees

Washington CNN —  

Aiming to restore voters’ faith in Congress, the Senate overwhelmingly approved a bill Thursday that makes clear it’s illegal for members of Congress, their staffs and many executive-branch employees to trade stocks and other securities based on inside information learned on the job.

The Stop Trading on Congressional Knowledge (STOCK) Act, which President Barack Obama has urged Congress to approve, passed 96-3.

The bill states that insider trading is criminal and requires public disclosure online of any trades within 30 days of a transaction. It was aimed initially just at Capitol Hill. However, Republicans clamored for the inclusion of executive-branch employees.

“The same standards should apply to the White House and the executive agencies that spend hundreds of billions of dollars at the president’s direction,” said Senate Minority Leader Mitch McConnell, R-Kentucky.

Obama, referring to his State of the Union address, said in a statement: “Last week, I called on Congress to pass a bill that makes clear that Members of Congress may not engage in insider trading. … So I’m pleased the Senate took bipartisan action to pass the STOCK Act. I urge the House of Representatives to pass this bill, and I will sign it right away.”

“We will quickly review the entire bill and the amendments that were added today to ensure that public servants, whether in the legislative or executive branch, do not personally profit from insider information. It is critical that the bill we send to the president guarantees that the same rules apply to those in the federal government as they do to everyone else,” Cantor said in the statement.

Senators approved an amendment by Sen. Richard Shelby, R-Alabama, that Republicans said would require about 28,000 senior executive-branch employees to abide by the new disclosures. Sen. Joseph Lieberman, I-Connecticut, a key backer of the bill, opposed the provision, warning its reach could be far broader. He said it would affect as many as 300,000 federal workers, including “drivers (and) secretaries.”

Lieberman wanted to include only about 2,000 of the most senior executive-branch employees – those “who hold positions most equivalent to those of us in Congress who are policymakers,” he said.

Shelby said his approach “creates parity, fairness and true transparency.”

The STOCK Act became a catchall bill for ethics-related changes lawmakers want to impose on Congress. Several senators argued that with the approval rating for the institution near single digits, they owed it to the American people to adopt strict reforms to restore confidence.

Sen. Charles Grassley, R-Iowa, won approval of an amendment that would regulate people who gather “political intelligence” from lawmakers and their staffs with the purpose of using the information to make investment and business decisions. It would require these operators to register and abide by rules in the way lobbyists do.

Lieberman said he wanted more study of the issue.

But Grassley urged senators “not to vote for Wall Street, vote for my amendment,” and pulled out a narrow win.

An amendment by Sen. Barbara Boxer, D-California, passed easily. It would require lawmakers and their staffs and many top executive-branch employees to disclose the terms of their home mortgages. Boxer, as chair of the Senate ethics committee, recently conducted investigations of two senators who were accused of getting sweetheart deals from the mortgage firm Countrywide Financial.

Another measure quickly approved was proposed by Connecticut Democrat Richard Blumenthal. It expands the list of felonies a lawmaker could be found guilty of that would result in the revocation of his or her congressional pension.

“No official convicted of a felony in connection with his official duties as a member of Congress should receive one dime of taxpayer money,” Blumenthal said.

An amendment from Sen. John McCain, R-Arizona, which was approved, would block bonuses for executives at the controversial mortgage firms Fannie Mae and Freddie Mac.

However, an amendment to ban permanently legislative earmarks was defeated on a vote of 40-59. While there is currently a voluntary moratorium on earmarks in the chamber, there are many senators, including Senate Majority Leader Harry Reid, D-Nevada, who are determined to allow them again.

A separate earmark-related amendment by Sen. James Inhofe, R-Oklahoma, also failed. It would have allowed earmarks but only if they first were examined and approved by an authorizing committee of Congress.

Some amendments weren’t related directly to the STOCK Act and were defeated. They included a measure to eliminate duplicative government programs proposed by Sen. Tom Coburn, R-Oklahoma; and a measure aimed at creating term limits for senators offered by Sen. Jim DeMint, R-South Carolina.